Q Mr. Vice President, welcome back to the Hugh Hewitt Show.
Great to have you.

THE VICE PRESIDENT: Well, it's good to talk to you again, Hugh.

Q We have had an astonishing run of economic good news -- fourth
quarter GDP at 4.1 percent; inflation last year only 3.4 percent; 25
years ago today, Ronald Reagan got sworn in and inflation was 13.5
percent; 2 million new jobs in '05; unemployment is at 4.9 percent, Mr.
Cheney. But the Congress doesn't want to renew the tax cuts that
powered this beast?

THE VICE PRESIDENT: I know, and it's very important that we get
that done. I think you can trace the beginning of this significant
period of economic growth back to the spring of '03, when we cut the
rate on cap gains and dividends and accelerated the rate reductions
across the board. I think that was one of the most important decisions
we've made as a government, and I think it was absolutely essential that
we keep those rates going forward.

Q Is this story being adequately told in the press? Or is it
too much good news?

THE VICE PRESIDENT: Well, it is -- I don't think it's ever been
adequately covered in the press. I think some do cover it, obviously.
But as a general proposition, I think the mainstream press has more of a
tendency to go to try to find problems and harp on those and spend a lot
of time focused on those. I don't think it's political so much, it's
just a dynamic of the way the news business works for some of them.

But the bottom line is that a lot of people end up convinced that
the economy is not doing very well, when, in fact, it's been performing
superbly.

Q The Fed has raised rates 13 times in a row, a quarter point
each time. Do you think they're at the end of that? Do you want them
to be at the end of that?

THE VICE PRESIDENT: I'm reluctant to get into the business of
commenting on Fed policy. My friend Alan Greenspan, who's been the
chairman now for a long time, advised me a long time ago not to get into
the business of predicting Fed policy or commenting on it.

I do think if you look at the performance of the Federal Reserve
over the last several years, it's been superb. They've done a good job
of working with respect to maintaining the soundness of the dollar, and
avoiding a run-up in inflation, and providing adequate funds to keep the
economy kicking along, so I don't think we've got any complaints about
the way the Fed has performed in recent years.

Q Are you concerned about the so-called housing bubble, Mr. Vice
President?

THE VICE PRESIDENT: I don't know whether there is one, Hugh. I've
seen some speculation to that effect, and you may find some places in
the country where they might, I suppose, have a bubble effect. But I
think housing has been a tremendous investment for the American people.
Most of us have a good part of our savings or wealth tied up in our
houses. And as a general proposition, I think those have been great
investments for most Americans. And I'm not in a position today to be
able to say there's a bubble out there. I'm not really confident that
there is one.

Q Now, one of the threats and not just to human life but to the
economics that define our modern condition is avian flu. Have you been
involved in the planning for the potential of the arrival of avian flu,
and its possible economic consequences, Mr. Vice President?

THE VICE PRESIDENT: We have been involved in it. The President
has been heavily engaged in it, and the fact of the matter is it's one
of those potential problems on the horizon. You hope that it won't
happen. On the other hand, we have had flu pandemics in the past,
especially in 1918 when millions of people worldwide lost their lives.

And the avian flu now that we've seen in Asia and most recently in
Turkey is still primarily focused obviously on fowl, and we don't yet
have the human-to-human transmission that would be the sign of a
mutation of the virus that would lead to a pandemic. But it's something
that clearly bears watching. We've spend a lot of time planning it and
looking for a response, made congressional proposals, have active
efforts underway in the executive branch to do everything we can to be
prepared for that kind of eventuality should it happen.

Q Do you think the private sector on the economy side is
prepared for this, should it arrive here?

THE VICE PRESIDENT: Well, it's the kind of thing I think that
probably would have a major impact, partly -- one of the things you do
-- obviously, you'd like to have everybody inoculated against this kind
of eventuality. But, frankly, right now as a result of things that have
happened over the years, we don't have flu vaccine manufacturers in
sufficient numbers here in the United States. We need to address, for
example, the question of liability in order to encourage people to get
into the business. It hasn't been all that profitable in the past.

I think also when you start to think about a pandemic, some of the
early measures basically are to shut down transportation systems, close
schools and public meeting places and so forth in order to minimize the
possibility of transmission between individuals while you take the
necessary measures to try to protect people against possible infection.
So there are things clearly that would have significant economic
consequences were there to be such a pandemic.

Q One of threats to the economy, of course, oil back up about
$66, $67 per barrel. A lot of that is related to Iran's recklessness
and the capriciousness and outright strangeness of their leader and his
statements, and today reports that they are moving assets around. Have
you been involved in planning a response to Iran going nuclear, Mr. Vice
President?

THE VICE PRESIDENT: Well, the Iranian issue has been a problem
that's been on the table here for some time now. We've been working
obviously and most recently through the EU3, the Europeans -- the
Germans, the Brits, and the French -- in an effort to persuade the
Iranians not to go down this road. That effort is still underway.
Obviously, to date, it has not been successful. And the problem has
gotten more pronounced since Mr. Ahmadinejad became President and began
to make some of the more outrageous statements that he's made.

One of things I think about when we talk about the economic
consequences of a potential confrontation or crisis over the Iranian
nuclear program -- of course, people start to worry about oil again --
the thing I keep thinking about, it would be great if we had ANWR
online. That would be another million barrels a day that would a U.S.
production that would reduce our dependence on foreign sources.

And it's unfortunate that in spite of the effort of several years
and passage through the House, we've not yet been able to get ANWR
approved through the Senate. That's exactly one of the reasons why we
need an effective energy policy that does reduce our dependence so that
we are not sort of capable of being blackmailed when confronted with
something like an irresponsible Iranian government.

Q Two nights ago, Senator Clinton said Iran must not be, in
absolute terms, allowed to have nuclear weapons. Do you agree with that
absolutism on the bar, Mr. Vice President?

THE VICE PRESIDENT: Well, I think everybody agrees that the world
would be better off and safer and more secure, if the Iranians do not
have nuclear weapons. The question is, how do we get to that point?
And it's easy to make a statement, obviously, say that we've been
working, the President's been working, Secretary Rice, to achieve a
diplomatic result here, and hopefully we'll ultimately be successful. I
expect there will be a meeting of the Board of Governors of the
International Atomic Energy Agency here within a couple of weeks, and
ultimately potential referral of the whole matter to the U.N. Security
Council.

Q Does America keep a military option on the table, Mr. Vice
President?

THE VICE PRESIDENT: No President should ever take the military
option off the table, if I could put it in those terms. I think it's
important that all options are on the table. And that's not a predictor
of anything, it's just as a general proposition. When you're dealing
with important issues like this, you don't want to take any options off
the table.

Q Have you been involved in any planning, with regards to that,
Mr. Vice President?

THE VICE PRESIDENT: Well, I won't go beyond where I am, Hugh.

Q All right. Yesterday on CNN, Jack Cafferty suggested that the
administration may be timing the release of the Osama tape whenever bad
news rears its head. A little bit crazy, but what do you react --
what's Dick Cheney's reaction when commentary like that comes out of a
major network?

THE VICE PRESIDENT: We don't control the release of the Osama bin
Laden tapes, Al Jazeera does, or seems to. And they were the source of
this most recent tape. I think they've been the source of virtually all
of these tapes. When the al Qaeda organization has something to say,
they tend to say it through or release it through Al Jazeera primarily
in Doha, in Qatar. And that's where we get out information, as well, is
when it goes public from Al Jazeera.

Q Do you believe there are ties between the Iranian regime and
al Qaeda, Mr. Vice President?

THE VICE PRESIDENT: I wouldn't put it in those terms. I think
you've got to remember that the al Qaeda organization is primarily made
up of radical Sunni Islamists, of course, and the Iranian regime is
Shia-dominated -- Shia. So there's not a natural fit there. That
doesn't mean that there haven't been relationships over the years, but I
don't believe it's close. I haven't seen any evidence of that.

Q One of the biggest objections to the NSA surveillance of al
Qaeda agents in the United States program is that the administration
didn't go to FISA. And the question keeps coming up, and I'll ask you,
why not go to FISA for some of these programs?

THE VICE PRESIDENT: Well, we've made it clear that what we have is
a presidential -- the President has described it -- that what we're
interested in are intercepting communications, one end of which are
outside the United States, and one end of which we have reason to
believe is al Qaeda-related. I don't want to go into any more detail
than that.

We have, we believe, all the authority we need in Article II of the
Constitution, the President's authority as Commander-in-Chief under the
Constitution, as well as previous actions of the Congress, to justify
and authorize exactly what we're doing.

We do safeguard the civil liberties of the American people. This
is not a domestic surveillance program, as it's been referred to
frequently by the press or some of our critics. It is, in fact, about
communications that, say, that involve -- at least one end of the
communications involve al Qaeda and a connection outside the U.S.

I can say for a fact that it's been a very valuable program, that
it's saved lives and let us interrupt terrorist operations. I can also
say that it's been briefed on a regular basis to the Congress, that on
more than a dozen occasions, congressional members have been informed of
the status of the program.

Q Two more questions, Mr. Vice President. Robert Kaplan has
written a new book, Imperial Grunts. I don't know if you had a chance
to read it yet.

THE VICE PRESIDENT: I haven't seen it yet.

Q He argues that big army is quashing the initiative in places
like the Afghan-Pakistan border of the Special Forces. Do you believe
that's a correct criticism?

THE VICE PRESIDENT: Big army?

Q Yes, you know, Pentagon, too much brass, too much --

THE VICE PRESIDENT: No, I would disagree with that. I think our
special ops forces these days are superb, better than they've ever been
-- highly skilled and highly trained and highly motivated. I've had the
opportunity to spend some time with them. A lot of what they do is
classified. And it may be that the knowledge is lacking out there in
terms of exactly how good they are. But I think the special ops forces
that we field in places like Iraq and Afghanistan are superb.

Q My last question, Mr. Vice President, Jerry Tardy (ph) is my
next door neighbor, he's an old basketball coach. He keeps asking me,
any way to persuade the Vice President to reconsider not running in '08?
So I'll ask you, any way?

THE VICE PRESIDENT: I'm very happy where I'm at. I've got three
more years to go, serve this President, and then I expect to hit the
road. I've got other things I need to do at that point. It will have
been nearly 40 years since I arrived in Washington to stay 12 months,
and I think that's probably long enough.

Q Mr. Vice President, thanks for your time today. I look
forward to talking to you again.